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The Curious Budget Process

March 25, 2010

As long-time observers of Albany, members of the NT2 editorial board are not surprised by anything when it comes to the state budget process.  That said, we’re scratching our heads on how the Governor and legislative leaders could so easily give up on an on-time budget. This is what appears to have happened, with lawmakers now poised to depart the Capitol for a week off.

How could this be? How, when so much is at stake in an election year, could the lawmakers seem so cavalier?  The following is NT2’s attempt to deconstruct this situation and identify the most likely outcome:

First, the Governor’s budget was never going to be adopted without modification. The Legislature has to tinker with it. That’s what lawmakers do. They restore funding. They address matters they think will create political problems for them in their districts.

This year, the biggest political problem was taxes – more so than spending levels. Polls show that voters actually want spending reductions and are strongly opposed to any new taxes. Lawmakers understood this. That’s why they made only limited restorations and rejected virtually all of Paterson’s proposed “revenue enhancements.”

But a fiscal gap emerged as a result of these actions. To remedy it, lawmakers embraced a borrowing proposal devised by Lt. Governor Richard Ravitch.

Then came the hitch – the Governor’s office distanced itself from the Ravitch plan. This took lawmakers by surprise. While it is possible that this is yet another example of Paterson being erratic, it is more likely that there’s some strategy involved. In this regard, the governor may be trying to get the legislative leaders to accept more in the way of cuts.

Assembly Speaker Silver knows how this game is played. He was probably expecting the Governor to come back to him with a new offer that was somewhere in between the spending amounts identified in Assembly and Senate resolutions. And we’re not talking about a huge difference here, only about a half a billion dollars, which in the context of a $136 billion spending plan, is nothing. 

But now comes the really curious and frustrating thing: There appears to have been little or no meaningful dialogue to resolve this impasse.

The lawmakers stepped back, hoping that apparent divisions with the Paterson administration would resolved themselves. There are continued rumors of discord between Ravitch and the Governor’s chief of staff.

Meanwhile, Governor Paterson simply shrugged. He says he’ll do two-week austerity budget extenders for as long as it takes. 

This might not be the typical situation in which a governor frets and frets about his declining poll numbers and then agrees to additional spending to get a deal done. Paterson is already at historic lows in the polls. He’s not running for reelection and has nothing more to lose.  This means that lawmakers may have no other choice than to accept deeper cuts. If so, it is probably better to accept the cuts now. A timely budget that makes tough decisions can be either blamed on Paterson or sold as a responsible action. But there’s no dressing up a late budget, especially this year.

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